Mathan Somasundaram

Global markets are running on central bank stimulus hope while earnings remain weak. The inability of central banks to pull their economies away from stimulus dependencies has created an inefficient distribution of resources. Lack of fiscal reform and unwillingness of governments to make the hard decision is forcing central banks to remain in the easing bias. Central bank effectiveness is running into the “law of diminishing marginal returns” while governments are continuing to drive up debt and deficits. The profit taking risk is rising into the US and its local reporting season, while the medium to long term outlook remains positive. Central Banks are stuck repeating the same stimulus process due to conflicting fiscal policy settings prolonging the recovery cycle. It is insane to repeat the same process and expect a different result.... (VIEW LINK)


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